Illogical deductions.

Author:Postrel, Virginia I.

Editorial The Republican Party's Contract with America reflects their desire to control the public using the IRS as the tool. The American Dream Restoration Act, which exempts money set aside for retirement and higher education, earns it the trust and confidence of voters.


When the Republicans announced their Contract with America, Rep. Dick Armey attacked the old Democrat-dominated House for having "adopted as its central philosophy the belief that ordinary people cannot be trusted to spend their own money and make their own decisions."

The Republicans, he said, "propose to cede back power from the hallowed halls of Congress to the more hallowed kitchen tables of America, where night after night families bow their heads in thanks and make decisions about education, charity, jobs, spending, debt, and values with a wisdom and compassion that no number of agency heads, cabinet secretaries, or members of Congress could ever match."

Unfortunately, Armey was speaking mostly for himself. The Contract itself is proof positive that most Republicans still have a long intellectual journey to make before they really cede power to the kitchen tables of America.

Deep down, most Republicans are still in love with planning other people's lives, setting other people's priorities, making other people's decisions. But unlike the Democrats, with their alphabet soup of bureaus, Republicans rely primarily on a single government agency to manipulate public behavior: the Internal Revenue Service. And, oddly enough, letting the IRS enforce their vision of how Americans should live makes Republicans look like good guys, bearing gifts.

Consider the "American Dream Restoration Act," promise number five of the Contract. Among its provisions, this bill would exempt from income taxes the interest earned on "American Dream Savings Accounts" - money set aside for retirement, post-secondary education, medical care, or a first home. Republicans point to this provision, along with such "pro-family tax reforms" as a $500-per-child tax credit, when asked how their pledges will affect individual Americans.

"Our act," says the Contract, "is designed to deliver relief from the heavy burden of government and let families keep more of their hard-earned dollars to pursue their own version of the American dream." (Emphasis added.) Unfortunately, that talk about "their own version" is mostly boiler plate; Congress will determine which dreams are worthy of tax breaks. If you save to start a business, buy a car, send your kids to parochial school, pay for your daughter's wedding, or move to a larger house, you'll get hammered with the usual taxes.

The impulse to direct the financial choices of a quarter billion Americans is just too strong for most...

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